Retirement and the state pension

More than half (52%) of people fear they will not have enough money to maintain their desired lifestyle in retirement, a study has found. 

YouGov polled more than 4,000 adults on behalf of The People’s Pension and discovered many people are looking to other sources of income to fund their retirement. 

These include:

  • working part-time (39%)
  • downsizing property (27%)
  • receiving inheritance (24%).

Over half (52%) of over-55s still in employment admitted they were unsure of what age they would start receiving the state pension.

Furthermore, 55% did not know how much the full of state pension is.

Among people aged 18 to 24, 93% were unsure of the weekly state pension rate and another 83% had no idea when they would receive the state pension.

Darren Philp, director of policy and market engagement at The People’s Pension, said:

“People may choose to work part-time or survive on uncertain funding sources, such as an inheritance or property. 

“These precarious pensioners are not generations of the future but include those over 55, many of whom may be unprepared for retirement.”

Receiving state pension

Depending on your gender, your national insurance record and when you were born, you will start receiving your state pension when you reach the government’s state pension age. 

Many women currently get their state pension at 63 years old and men at 65.

Those who reached their state pension age before 6 April 2016 will qualify under the old rules, while those who reached their retirement age after this date qualify for the new state pension. 

The full new state pension amount is £159.55 a week from 6 April 2017 until 5 April 2018. However, you need at least 10 qualifying years on your national insurance record to claim 

To obtain the full amount, you must make national insurance contributions (NICs) for 35 years.

You will receive a proportion of the new state pension if you have between 10 and 35 qualifying years of NICs. 

Age rise

The state pension age is being raised over a period of time with both men and women getting their entitlement at 66 years old in 2020.

The government also brought forward the rise in state pension age. The age will increase to 68 between 2037 and 2039, rather than between 2044 and 2046 as originally planned.

If you were born between 6 April 1970 and 5 April 1978, you will remain in employment for an extra year before reaching your state pension retirement age.

Those born on or before 5 April 1970 will not be affected by the change.

Contact us to discuss the state pension.